Impacted by Macroeconomic Conditions, CVC BTPN Syariah Delays Adding to Portfolio This Year

BTPN Syariah VentureBTPN Syariah's CVC unit has postponed adding one new investment to the startup until the end of this year. The ongoing macroeconomic conditions post-pandemic are still having an impact on the company's performance, forcing it to be more conservative than before.

BTPN Syariah Finance Director Fachmy Achmad explained that there is one startup that has been explored, and has even been implemented piloting for business collaboration. However, because BTPN Syariah Ventura is not a CVC that has large funds under management, they cannot become investors lead in a fundraising event held by the startup.

As a result, the startup mentioned is currently looking for investors lead to lead fundraising. "So it doesn't look like it can be [announced] this year," said Fachmy at a media gathering in Jakarta, yesterday (18/10).

He cannot yet reveal the identity of his portfolio candidate. It can only be confirmed that the startup operates in a field that upholds the micro and ultra-micro segments, in line with BTPN Syariah's main business. "Can social commerce, record keeping, and POS. But cansocial commerce we already have [Trade].”

This CVC debuted in June 2022 with the lead pre-series B round for Merchandise valued at $6,6 million. Other investors also participated in this round, such as Monk's Hill Ventures and Hendra Kwik (Payfazz).

Before officially funding a startup, BTPN Syariah Ventura takes a position as a strategic investor, so there is a different approach in assessing the risk profile. Apart from having a mandate, his party doesn't just look at valuation and startups that are pursuing exponential growth, the most important thing is how committed they are founder to always maintain the bottom line in its financial performance.

This can be seen from his debut into Merchandising which started with pilot project in early 2020. At that time, Dagangan provided stock of grocery items in the form of economical packages that BTPN Syariah debtors could purchase. These products can later be resold in their home environment.

Because you sell grocery items, the turnover of money is much faster, only around one to two days. This partnership continued until both companies integrated the API into their respective systems. Satisfied with the results obtained, the investment disbursement was finally given to Dagangan.

With a business model social commerce which has proven successful in the field, this startup still survives amidst the sluggish performance of similar startups. Ula, for example, decided to leave its main business and carry out major efficiencies before pivoting to a new business.

There is also CrediMart which has now changed its business focus and rebrand became Jooalan. Shox, Meesho, Grupin, RateS and others even had to leave this business.

BTPN Syariah Ventura's managed funds are relatively small, namely IDR 300 billion (from issued and fully paid capital). Compared to other CVCs, BNI Modal Ventura, for example, received basic capital of IDR 500 billion when it was introduced last year. Furthermore, BRI Ventures received an injection of IDR 1 trillion when it was just founded in 2019.

Encourage the quality of financing

Fachmy also said that because the CVC's mandate was conservative from the start, that's why it wasn't naughty to pursue targets fund a startup per year. Moreover, post-pandemic macro conditions which are considered challenging have made BTPN Syariah more careful in maintaining its performance.

“Because of the challenging conditions, this VC team is also a team at BTPS. So it's better for us to focus on the main business."

Even though conditions are still quite challenging, BTPN Syariah is still capable of achieving growth. The distribution of financing to inclusive communities in the third quarter of 2023 reached IDR 11,9 trillion, up from IDR 11,3 trillion in the same period last year. Net profit after tax reached IDR 1 trillion.

The main business of BTPN Syariah itself is the distribution of productive financing without collateral to mothers in second and third tier cities. To maintain the quality of distribution, the bank has made a number of initiatives. One of them is providing incentives for center members who have an attendance rate of 90% at the group or Center Routine Meeting (PRS) every two weeks and pay installments on time.

In addition, the bank also involved more parties in the mentoring program by recruiting more than 1.600 students from 258 universities in 20 provinces in Indonesia. They are involved as facilitators in the Besteeproper program (Together with the Empowerment of Indonesian Companion Friends).